The effect of the UK’s exit from the European Union has somewhat gone under the radar so far this year, owing to the colossal impact of the pandemic, but we are starting to see the fallout.
While most economists will tell you about the adverse impacts of leaving the EU on things like GDP, in the mortgage space we’ve seen a specific issue where lenders are no longer lending to British expats living in EU countries.
Hopefully this is just a temporary change and UK-EU Financial Services negotiations go more swimmingly compared to the recent vaccinations row. While there are fears that some lenders may pull out of these markets permanently, it seems the institutions themselves are keen to continue their activities if and when they can.
While fewer people from the EU are now renting in London, and there have been reports of tenants leaving the capital in droves, it’s interesting that Fabrik Invest is still talking up the appeal of the UK to overseas investors – saying that overseas investment is likely to come from the Middle East, Hong Kong and South Africa this year.
I suppose the UK’s relatively weak currency historically does give some people in those regions a motivation to buy, but the struggles with travel in the current climate surely means that many of these investors will have to buy off-plan.
With this in mind I’d be surprised if there was overwhelming demand to buy from overseas, but you’d still expect some savvy investors to try and use the current situation to their advantage by securing a good deal.
London in particular has so much history and pull power that it seems to receive demand from investors regardless of any domestic troubles.
Ryan Bembridge, Editor, PropertyWire
